What Type of Car Loan Can I Get?

Get Car Financing
Even with poor credit.

By

Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - July 2, 2019

Just what kind of car loan you can get depends heavily on your credit score. The better your score, the better the loan terms you generally qualify for. If you have great credit, you shouldn’t have a problem walking into a dealership and getting financed. When you have bad credit, however, getting a traditional auto loan isn’t as easy, and you may need to find a subprime lender.

Traditional vs. Bad Credit Auto Loans

When you have good credit, you have a number of options to choose from when it comes to car financing. You can go to a direct lender, like a bank or credit union, to get pre-approved, or you can go to a dealership and get financed through an indirect lender, like a subprime lender or manufacturer-specific finance companies such as Ford Motor Credit or GM Financial, if you have your eye on a specific vehicle. Many times, if you have excellent credit, a traditional lender won’t ask for proof of income, and just run a credit check.

On the flip side, if you’re looking for a bad credit auto loan, you could try to work with a direct or indirect lender, but most are probably going to turn you down. Your safest bet if you’ve been turned down for a car loan is to look for a subprime lender through a special finance dealership or in-house dealer financing.

Subprime lenders specialize in dealing with consumers who have less than perfect credit, and look at outside factors in addition to credit scores, such as income, residence stability, and down payment. In-house financing dealerships are both lenders and dealers, and, for the most part, don’t run credit checks. Instead, your income and down payment determines what you qualify for.

Keep in mind that because your credit isn’t so hot, your interest rate isn’t going to be so great, either. Both subprime lenders and in-house financiers are willing to work with bad credit, but to offset the added risk, they charge higher interest rates – usually in the double digits.

Where to Get a Bad Credit Auto Loan

If you know you need a bad credit auto loan, where do you find a subprime lender or in-house financing dealer?

Subprime lenders work with special finance dealerships, and not all dealers market their ability to work with bad credit car buyers, so it can be tough to spot them.

In-house financing dealerships like buy here pay here or tote the note dealers finance in-house. These dealerships have lots full of many different model used cars – from older models to lightly used cars to possibly even luxury vehicles. You just don’t know what you’re going to find!

Let Us Do the Searching for You

You could drive around town going to dealer to dealer looking for the right one, but why put that stress on yourself? We can do the searching for you, plus, it’s free.

At CarsDirect, we connect consumers to dealerships that have the resources to assist car buyers in many types of credit situations. We also have new and used car sections so you can compare and research specific vehicles you’re thinking about.

Once you feel confident and are ready to find financing, start today by filling out our auto loan request form.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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